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A. O. Smith Corp. and Japan's Takagi Industrial Co. Ltd. established a joint venture to manufacture and market tankless water heaters in North America, which means A.O. Smith-brand tankless water heaters will no longer be produced by Rinnai America.
As part of the venture, A. O. Smith will take over management of Takagi’s existing North American sales and distribution organization and will maintain Takagi’s North American headquarters in Irvine, CA. The companies expect the transaction to close in the third quarter of 2010.
Through the joint venture, A. O. Smith will offer a full line of tankless gas water heaters under its own brands in association with the Takagi brand and will assume responsibility for the Takagi brand in the U.S. and Canada. Takagi currently manufactures gas tankless water heaters in Japan for residential and commercial applications.
Manufacturing will begin in the U.S. upon "achieving an appropriate volume threshold," A.O. Smith said.
Rinnai America said it informed A.O. Smith in September of 2009 that it would not continue to produce tankless water heaters for A.O. Smith.
"It is unfortunate that A.O. Smith could not produce the results that were the foundation of the agreement," said Rinnai General Manager Phil Weeks. "Both companies expended a lot of effort to launch this program."
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